Airports face uncertain future

A LIFEBLOOD of regional communities – airports – face increasingly uncertain futures, despite a resurgence in the number of Australians taking to the skies.

The mining boom has sparked big leaps in airport patronage over the past five years, helping regional airstrips grow at a faster total rate than much bigger airports in major cities.

However, not all towns and cities experienced the aviation renaissance and many cash-strapped councils could soon sell their struggling airports, while airlines could pull the plug on some regular services, industry figures warn.

“Regional airports are critical for their local communities. Not only do they link family and friends and help people reach parts of Australia for leisure, they’re also a critical link to the economic well-being of the town and, in many cases, the health of its residents,” said Australian Airports Association chief executive Caroline Wilkie.

“They help communities click over.”

Airport traffic for the top 58 routes from June 2011 to June 2012. Thicker lines indicate more traffic, thinner lines less traffic. Lines are not the actual airline route, but are arcs connecting the origin and destination. Data courtesy BITRE.

A report prepared for the association by Deloitte Access Economics reveals a wildly differing story of how regional areas use the skies for travel.

Since 2005, airlines have reduced routes at 45 regional airports. Only 25 new routes have been introduced elsewhere. Competition has also dwindled. The number of airlines servicing regional airports fell to just 28 in 2010. In the early 1990s, there were twice as many.

But dozens of airports are also experiencing surging demand. The biggest increases in passenger numbers have occurred at once-obscure airstrips reinvigorated by nearby mining. Airports at Cloncurry, Emerald, Biloela, Karratha, Leonora, Moranbah, Port Augusta, Doomadgee and Roma have doubled or even quadrupled usage over the five years to July last year.

Other airports in large regional centres, including Albury, Broken Hill, Bathurst, Tamworth, Mildura, Port Lincoln, Launceston and Devonport, are also standout performers, buoyed by diverse economies and tourism.

Number of inbound passengers over time - click 'play' to see it animated, or use the slider to go to a specific year.

However, Deloitte Access Economics estimates only half of all regional airports turn a profit, making it difficult for councils to keep up basic maintenance, let alone any expansion that could improve patronage or attract a regular carrier. The costs of staffing a basic airport with no regular passenger service can easily hit $250,000 a year.

Ms Wilkie said airports needed to operate at the “elusive intersection between commercial reality and community need”. Some level of ratepayer subsidy was inevitable, she said, but the amount was continually growing.

“We expect that a number of major regional airports will move towards sale or private operation in coming years, as the size of the infrastructure and its costs either become too onerous for local councils to manage, or when councils see that the return on their investment over the years can be better invested in other local infrastructure,” Ms Wilkie said.

She also suggested demand for aircraft to service the resources sector was having a knock-on impact on airports not sharing in the boom.

“If you have an aircraft and you can choose between going on a mining route and charging a very high amount per seat, or a small regional community where you can’t charge as much, you will go to the mining route,” Ms Wilkie said.

Use the check-boxes at the side to select and compare specific airports.

“There are only so many aircraft in Australia, so everyone is sort of posturing to get those aircraft.”

An upgrade to the ageing airport at Orange, in central-west NSW, is one of many examples of how mining has breathed new life in the air industry. The city’s council is pushing ahead with the $14 million airport overhaul, even though passenger numbers grew just 5.8 per cent over the five years to 2010-11.

A key driver for the project sits just a few kilometres down the road: Australia’s biggest gold mine. The proposed expansion will allow the mine’s owner, Newcrest, to use a large jet to fly workers to and from Western Australia and other areas, according to Orange mayor John Davis.

“An extended runway and new terminal has probably helped us attract… a second commercial airline recently,” Cr Davis said.

“Our airport has always been important to our town and our economy and I don’t think it’s unreasonable that we spend some money to make sure it stays that way.”

Newcrest, the NSW and federal governments will contribute nearly $9 million towards the project.

Authorities in western Victoria are also hoping to use its newly refurbished airport to fly retrenched Stawell goldmine workers in and out of Cobar for work.